Welcome to Breaking the Blueprint — a weblog sequence that dives into the distinctive enterprise challenges and alternatives of underrepresented enterprise house owners and entrepreneurs. Learn the way they’ve grown or scaled their companies, explored entrepreneurial ventures inside their corporations, or created facet hustles, and the way their tales can encourage and inform your individual success.
Black-owned banks have been pillars of the Black group for the reason that late 1800s after they have been based to struggle towards the financial inequality Black People felt in accessing monetary companies.
Regardless of being in a brand new millennium, these banks are nonetheless a number of the few establishments that supply equitable assist for Black enterprise house owners. Learn on to study extra concerning the historical past of Black-owned banks and the way you should use them to begin your enterprise.
The Historical past of Black-Owned Banks
Freedman’s Savings and Trust Company was the primary financial institution to serve previously enslaved individuals in 1865. Capital Savings Bank opened in 1888 in Washington, D.C., as the primary financial institution organized and operated by Black People. A 12 months later, The True Reformers Bank in Richmond, Virginia, turned the primary chartered Black-owned financial institution within the nation.
Maggie Lena Walker turned the nation’s first Black feminine banker when she based The St. Luke Penny Savings Bank in Richmond, Virginia, in 1903. A number of years later, 9 businessmen based Mechanics and Farmers Bank (now M&F Financial institution) in Durham, North Carolina, in 1907. They have been among the many 134 Black-owned banks that served the Black group from 1888 to 1934.
Sadly, the variety of Black-owned monetary establishments has decreased considerably, as Black-owned monetary establishments declined over 50% from 2001 to 2018, and there are solely 19 Black-owned banks immediately.
Nevertheless, many Black entrepreneurs discover the assist they want with these companies, and they’re invaluable instruments for creating monetary literacy and beginning entrepreneurial ventures. Beneath we’ll talk about how you should use Black-owned banks to begin your enterprise.
Learn how to Use Black-Owned Banks to Begin Your Enterprise
1. Open accounts
Black-owned banks supply many account choices for enterprise house owners. You possibly can open enterprise accounts at banks like Alamerica Bank and Carver State Bank that supply in-person branches and on-line and cellular banking to entry your accounts from wherever you’re, each time it’s essential.
2. Apply for loans.
Banks like OneUnited Bank and Harbor Bank of Maryland make it simpler for Black entrepreneurs to entry and develop capital with lending packages.
For instance, OneUnited Financial institution provides lending packages within the type of small business or commercial real estate loans.
OneUnited Financial institution and Harbor Financial institution of Maryland have been amongst some Black-owned banks that offered PPP loans for enterprise house owners in the course of the early days of the pandemic. Harbor Financial institution of Maryland funded 694 PPP loans that totaled $66 million all through the pandemic. Many of the loans have been issued to Baltimore, Washington, D.C., and Virginia companies.
3. Construct credit score.
Many entrepreneurs use credit score to determine their companies, however, sadly, monetary establishments disproportionately deny Black People credit score alternatives, or they obtain much less credit score than they request, in accordance with Federal Reserve data.
Given this, Black-owned banks are an important supply of credit score for Black entrepreneurs. Many supply a spread of bank card choices, and a few Banks, like Citizen Trust Bank, assist prospects find out about constructing and sustaining credit score.
4. Obtain monetary schooling.
Black-owned banks supply alternatives exterior conventional banking companies, like schooling and monetary literacy packages for underserved communities.
Industrial Bank, for instance, works to strengthen the economic system by way of partnerships and monetary schooling seminars for Black-owned companies. It reinvests over 60% of its property into its communities yearly, and groups of skilled bankers present hours of economic schooling seminars for purchasers.
M&F Bank additionally provides a monetary literacy course that helps small enterprise house owners learn to accomplice with monetary professionals, develop their companies, and develop monetary expertise.
5. Get assist.
Uplifting the group has at all times been a precedence for Black People. Black-owned banks prioritize supporting their communities by offering coaching alternatives and jobs for his or her prospects.
Carver Federal Savings Bank is a superb instance, providing community-focused banking for underserved neighborhoods. It focuses on creating dependable, long-term relationships with its prospects, strengthening the general financial development of Black People.
Black-owned Banks Lie on the Forefront of Change
Black-owned banks may be one of the best supply of success for Black entrepreneurs, serving to folks develop monetary literacy, construct credit score, and get the capital they should pursue their ventures.